B-125477, NOV. 7, 1955

B-125477, NOV. 7, 1955

TO MR. R. J. WALTER, JR., AUTHORIZED CERTIFYING OFFICER, BUREAU OF RECLAMATION:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 15, 1955, FILE NO. 370, REQUESTING A DECISION AS TO THE RESPONSIBILITY OF THE GOVERNMENT IN CONNECTION WITH AN UNDERPAYMENT OF $357.18 TO THE COOK CONSTRUCTION COMPANY UNDER CONTRACT NO. 14-06-D-304.

THE UNDERPAYMENTS AROSE BY REASON OF A CONTRACT PROVISION PERMITTING THE GOVERNMENT TO REQUIRE SHIPMENT OF CONTRACT MATERIALS ON GOVERNMENT BILLS OF LADING AND TO DEDUCT THE COST OF SUCH TRANSPORTATION FROM PAYMENTS DUE UNDER THE CONTRACT. DEDUCTIONS WERE MADE MONTHLY ON THE BASIS OF BILLINGS MADE BY THE RAILROAD. PRIOR TO FINAL PAYMENT UNDER THE CONTRACT IN MARCH 1954 ALL KNOWN DIFFERENCES BETWEEN THE AMOUNTS DEDUCTED FOR FREIGHT CHARGES AND THE FREIGHT CHARGES ACTUALLY PAID BY THE GOVERNMENT WIRE RECONCILED, AND THE CONTRACTOR EXECUTED A GENERAL RELEASE ABSOLVING THE GOVERNMENT FROM ALL FURTHER LIABILITY IN CONNECTION WITH THE CONTRACT. THEREAFTER, IN THE FALL OF 1954, A COMPLETE AUDIT OF THE TRANSPORTATION VOUCHERS DISCLOSED OVERPAYMENTS WHICH WERE RECOVERED FROM THE CARRIER WITHOUT THE CONTRACTOR'S KNOWLEDGE.

YOU STATE THAT A QUESTION HAS ARISEN AS TO WHETHER GOVERNMENT OFFICERS OR EMPLOYEES COULD BE HELD IN CONTRAVENTION OF THE PROVISIONS OF SECTION 283, TITLE 18, U.S. CODE, FOR NOTIFYING THE CONTRACTOR THAT REFUND IS DUE HIM OR FOR MAKING A REFUND TO THE CONTRACTOR IN THE ABSENCE OF A CLAIM THEREFOR. WHETHER CERTAIN ACTS WOULD OR WOULD NOT CONSTITUTE A VIOLATION OF CRIMINAL STATUTES, SUCH AS 18 U.S.C. 283, IS A MATTER WITHIN THE JURISDICTION OF THE DEPARTMENT OF JUSTICE, NOT THE GENERAL ACCOUNTING OFFICE, AND FOR THAT REASON WE MUST DECLINE TO EXPRESS AN OPINION THEREON.

HOWEVER, WE DO NOT BELIEVE THERE IS ANY LEGAL LIABILITY ON THE PART OF THE GOVERNMENT TO MAKE PAYMENT OF THE AMOUNT IN QUESTION TO THE CONTRACTOR. ON MARCH 3, 1954, IN CONSIDERATION OF THE PAYMENT TO HIM OF $887,547.90, THE CONTRACTOR RELEASED THE GOVERNMENT FROM ALL DEBTS, ACCOUNTS, CLAIMS, AND DEMANDS WHATSOEVER, LEGAL OR EQUITABLE, ARISING UNDER OR BY VIRTUE OF THE CONTRACT. THE CONTRACTOR WAS GIVEN THE RIGHT UNDER THE CONTRACT TO EXCEPT FROM THE OPERATION OF THE RELEASE ANY CLAIMS HE WISHED TO SET FORTH, AND HE STATED SPECIFICALLY IN THE RELEASE THAT THERE WERE NO EXCEPTIONS. IN A CONTRACT OF THE SIZE HERE INVOLVED IT IS NOT UNLIKELY THAT ERRORS WILL OCCUR. THE PARTICULAR ERROR OR ERRORS NOW IN QUESTION ARE RELATIVELY SMALL IN AMOUNT. THE PRESUMPTION IS THAT THE RELEASE WAS INTENDED TO AVOID THE NECESSITY OF MAKING FURTHER ADJUSTMENTS ON ACCOUNT OF ANY SUCH ERRORS. AS WAS STATED BY THE SUPREME COURT IN THE CASE OF UNITED STATES V. WM. CRAMP AND SONS, 206 U.S. 118, THE PURPOSE OF SUCH A RELEASE IS "TO MAKE AN ENDING OF EVERY MATTER ARISING UNDER OR BY VIRTUE OF THE CONTRACT.'

FOR THE FOREGOING REASONS WE ARE OF THE OPINION THAT NO FURTHER RESPONSIBILITY RESTS ON THE GOVERNMENT IN CONNECTION WITH THE MATTER.